Option Investor
Newsletter

Daily Newsletter, Wednesday, 9/9/2009

Table of Contents

  1. Market Wrap
  2. New Option Plays
  3. In Play Updates and Reviews

Market Wrap

S&P, Nasdaq Close at 11-Month Highs

by Judy Alster

Click here to email Judy Alster
Not a bad day, all in all. The stock market extended its gains Wednesday for the fourth straight session thanks partly to rising commodity prices and some fairly hopeful news from the Fed. The S&P 500 and the Nasdaq reached 11-month highs as industrial stocks rallied; the Dow Jones industrial average rose 50 points to its second-highest close of the year.

MARKET INDEX WRAPUP, WEDNESDAY, SEPT. 9

The market slipped briefly after the release of the Fed's report on regional economies, which said consumer spending would rise -- but only because of car purchases linked to the government's brief Cash for Clunkers program. The report also said the job market remains weak. (No!) Manufacturing news showed some promise, though; more on the Beige Book report below. (Of all the days to experience technical difficulties . . . .arrrgggghh! . . . that's why I was delayed posting this. In addition, regular readers will notice that these are not my usual graphs; the majority are courtesy of the excellent BigCharts.com. With luck I'll have my usual graphics back next week.)

Industrial shares were big gainers, as investors bet that higher commodity prices will mean increased profits if the economy strengthens; the weaker dollar also makes the goods of U.S. exporters cheaper outside the U.S. — but no economy has ever achieved a lasting strength on weak currency. Caterpillar Inc. (CAT) was a big mover; shares of the maker of construction and mining equipment rose $1.44 or 3.1% to $48.41.

CATERPILLAR:

Boeing Co. (BA) rose $1.03 or 2.1% to $50.53, while General Electric (GE) was up 37 cents or 2.6 % to $14.87.

The Energy Information Administration usually releases its weekly petroleum supplies report on Wednesdays, but this week will release it on Thursday along with the natural gas report. Thanks to a late rebound by the broader market, energy and materials stocks were able to close with at least some dignity. Crude oil prices showed real strength early in the day, finishing with a 0.5% gain at $71.49 per barrel.

AMEX OIL INDEX:

The Dow rose 49.88, or 0.5 percent, to 9,547.22. The index has added 267 points, or 2.9%, in four days. It was the Dow's second-highest close of the year, just below its Aug. 27 finish of nearly 9,581.

DOW JONES INDUSTRIAL AVERAGE:

The broader S&P500 gained 7.98, or 0.8%, to 1,033.37, while the Nasdaq composite rose 22.62, or 1.1 percent, to 2,060.39. It was the highest close for the S&P 500 index and the Nasdaq since October.

S&P 500:

NASDAQ:

Gold prices fell slightly but still within touching distance of $1000 after crossing that mark Tuesday. I mean, where else do you go when the dollar is weak? Gold ended the day at $997.10 per ounce, down a fraction.

Financials had lagged in the early going, but managed to make their way to a 1.4% gain and give support to the broader market. AIG (AIG) was a leader as it bounced back from a two-session slide. Capital One (COF) led financial stocks, thanks partly to an upgrade by analysts at Citigroup, who also said "yes" to shares of MasterCard (MA). Fortress Investment Group (FIG) showed unusual volume at 14.5 million and rose 19% to $5.32, thanks to its own upgrade by Barclay's, who like the whole asset-manager group.

MASTERCARD:

FORTRESS INVESTMENT GROUP:

Advancing stocks outpaced decliners by about 5 to 2 on the New York Stock Exchange.

Bond prices mostly rose. The yield on the 10-year Treasury note was flat at 3.48%.

One thing you may notice about several of today's charts is that prices have moved solidly into new territory and formed support. A good sign. But even little children know that trees don't grow to the sky, so if I were forced to predict, which I'm not really, I'd say that this rally will level off soon and probably make a nice floor.

As for economic reports, they seem — seem — to be getting rosier. Mortgage applications, for example, jumped 'way up last week, as the housing market (except on my block) continues to recover from its anemia. The Mortgage Bankers' Association's purchase application index, admittedly being goosed by the impending end of the government's first-time homebuyer credit, rose 9.5% for the biggest gain since April. The refinance index rose 22.5% for the biggest gain since March. To ice the cake, the average 30-year loan dropped 13 basis points to 5.02%.

One hates to be a party-pooper, but all this hoopla could fade when the first-time homebuyers' tax credit ends at midnight on December 1. In a related note, the Treasury Department released a report of its own which showed that although over 360,000 homeowners had their mortgages reworked lower in August, up over 50% from July, that's still only 12% of eligible homeowners.

Treasury has started releasing monthly reports on its Home Affordable Modification Program, or HAMP, which was launched in February. But the program, which pays cash incentives to mortgage servicers to reduce monthly payments to 31% of a borrower's income, is off to a slow start. Of course, 31% of an unemployed person's income is zero, so it's perhaps understandable that some lenders aren't jumping all over this. If it continues, according to Treasury, we can expect many, many more foreclosures and a revival of the infamous "cramdown" legislation. I'd be remiss if I didn't tell you.

Okay, enough housing gloom.

Shoppers parted with some cash last week: Chain-store sales rose 0.6% from the previous week to an above-trend, year-over-year minus-0.1%, said the International Council of Shopping Centers-Goldman's same-store sales tally (those are stores open at least a year). This is a weekly measure of comparable store sales at major retail chains; it's related to the "general merchandise" portion of retail sales and accounts for about 10% of all of total retail sales. A similar study from Redbook Research showed department stores, which have not been faring well, continuing to struggle, while discount stores did nicely, including in food sales.

RETAIL SALES:

Despite that finding, proven by the fact that every major department store except Kohl's was down significantly year-over-year in August, department store stocks have been doing pretty well. Saks (SKS), Dillards (DDS), Nordstrom (JWN) and Macy's (M), to name a few, are all climbing, although the last two weeks show them taking a rest. Nordstrom is representative:

J.W. NORDSTROM:

True, cooler-than-normal weather, combined with a late start for the school year in some parts of the country, helped the numbers. We should start to see positive year-over-year results in October and November, but it still won't be comparing apples to apples, since those were the months last year when spending really took a dive.

The Census Bureau's quarterly services survey was out today, too; it estimates revenue from information and technology-related service industries -- professional, scientific and technical services; IT; administrative and support services, and waste management and remediation services.

Total revenues for information businesses fell 0.4% in the second quarter to $274.3 billion; year over year, revenues were down 3.3%, same as the first quarter. Revenues at employment services, you won't be shocked to discover, fell 2.7% from the previous quarter for an 11.5% year-over-year decline.

SERVICE SECTOR THROUGH Q1:

And the big dog news that all were waiting for: The Fed's Beige Book, a snapshot of economic conditions in the 12 Federal Reserve districts. According to the Beige Book, economic activity is stabilizing or improving in the vast majority of the country, adding to evidence that the worst recession since the 1930s is drawing to an end.

All but one of the Fed's 12 regions indicated that economic activity was "stable," showed "signs of stabilization" or had "firmed." The one exception was the St. Louis region, which at least reported that the pace of decline in economic activity appeared to be "moderating." This confirms predictions by Fed Chairman Ben Bernanke and most other analysts that the economy has started to grow again in the current quarter.

Businesses in most Fed regions said they were "cautiously positive" about the economic outlook, more optimistic than late July's report. Analysts predict the economy is growing in the current July-September quarter at anywhere between 3% and 4%. Sounds optimistic to me, but I could be wrong. Most of that growth should come from more spending from businesses, which had slashed investments -- often by double-digits -- during the recession.

Before we get too breathless, consumer spending is expected to turn up only because of the binge-buying of automobiles generated by the short-lived Cash for Clunkers program, which like you I don't want to hear too much more about. Aside from brisk businesses at auto dealerships, other merchants struggled, leaving consumer spending soft in most Fed regions.

The prolonged slump in consumer spending has been one of the most serious points of worry for economists, and the Fed's warning about it deflated some of the market's optimism. About 70% of the U.S. economy depends — alas — on spending by consumers.

(All this reminds me of the folk tale about the mythical village of Chelm, where everyone made money by taking in everyone else's laundry. This madness is largely how Gross Domestic Product is calculated and it will be fodder for another column.)

Manufacturers in most regions, though, reported "modest" improvements — a sign I've always considered more indicative of an upturn than consumer spending, as enjoyable as that may be. The San Francisco region said orders rose for semiconductors and other IT products; Richmond, Atlanta, Chicago and Minneapolis reported increases or planned increases in automobile production ad several regions noted more production for pharmaceutical products:

INDUSTRIAL PRODUCTION, JULY:

The Fed also said that the residential real-estate market is no longer comatose, although most Action is coming in at the lower end of the market, again possibly due to that first-time tax credit.

The commercial real-estate market continued to drag. Demand for space remained weak and construction fell again in all regions.

On the jobs front, employment conditions remained weak in all the Fed regions. (No!) The nation's unemployment rate climbed to a 26-year high of 9.7% in August. It is expected to top 10% this year. Many economists predict that rising unemployment will keep consumers cautious.

UNEMPLOYMENT RATE:

The Fed's survey found that some staffing firms reported a "slight pickup" in demand for temporary workers. That's an encouraging sign because employers usually boost use of temp workers before they hire new employees.

And in keeping with the consumer-oriented theme, today's silly graph reveals a fact of shopping life that cannot be denied:


Thursday look for interest rate announcements from the Banks of England and Canada, the International Trade report, jobless claims, and the EIA petroleum and natural gas report. Will we have a fifth straight up day?


New Option Plays

New 2009 Highs

by James Brown

Click here to email James Brown


NEW DIRECTIONAL CALL PLAYS

General Dynamic - GD - close: 62.19 change: -0.72 stop: 57.30

Why We Like It:
The defense stocks are rising toward new relative highs. GD is leading the way with a new 2009 high this morning. I suspect shares will dip back and retest the $60 level as support before moving much higher. Therefore I'm suggesting a trigger to buy calls at $60.20. We'll use a stop under the September low. Our first target is $64.90. Our second target is $69.00. Investors with a longer-term time frame may want to aim a lot higher. GD has produced an inverse H&S pattern that is forecasting an $85 target.

Suggested Options:
I am suggesting the October calls.

BUY CALL OCT 60.00 GD-JL open interest=1317 current ask $3.40 
BUY CALL OCT 65.00 GD-JM open interest=3300 current ask .95

Annotated Chart:

Picked on September xx at $ xx.xx <-- TRIGGER @ 60.20
Change since picked:       + 0.00
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        2.3 million  
Listed on September 09, 2009         



In Play Updates and Reviews

Profits On Apple

by James Brown

Click here to email James Brown


CALL Play Updates

Apple Inc. - AAPL - close: 171.14 change: -1.79 stop: 164.00

Target achieved. Excitement and speculation before the AAPL media event today began sent shares to an intraday high of $174.47. Our first target to take profits was at $174.00. It looks like the stock suffered some sell-the-news sort of move later in the day. AAPL released a new iPod with a camera and new prices across several different models and this could have left some investors a little disappointed.

AAPL has now filled the gap from Tuesday morning and tested the $170 level as possible support. Do you sell now or hold on? I am suggesting that more conservative traders consider selling out completely. AAPL could face more selling pressure going forward now that the event is over. However, it's very possible that if the market keeps climbing that AAPL will climb with it. AAPL does have some support near $165 so I'm upping our stop loss to $164.75. I am not suggesting new bullish positions at this time. Our second target is $179.00. FYI: The P&F chart points to a $231 target.

Chart:

Picked on   August 26 at $166.50 *(small positions 1/2 to 1/4)
Change since picked:      + 4.64
                             /1st target hit @ 174.00 (+4.5%)
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =        14 million  
Listed on August 25, 2009         


Allegheny Tech. - ATI - close: 31.67 change: -0.30 stop: 27.95

After yesterday's big gains it was a minor victory to see ATI holding near its recent highs. I'm not suggesting new positions at this time. ATI has resistance near $32.00 and then again at its 100-dma near $32.88. If you're looking for an entry point look for a dip or a bounce from the $30 level.

Our first target is $34.50. Our second target is $39.00. Time frame on the first target is only two or three weeks. The $39 target could take several weeks.

Picked on   August 31 at $ 30.25 *triggered         
Change since picked:      + 1.42
Earnings Date           10/21/09 (unconfirmed)
Average Daily Volume =       2.7 million  
Listed on August 27, 2009         


CF Industries - CF - close: 88.08 change: +1.15 stop: 83.49 *new*

CF continues to perform well. The stock added another 1.3% today hitting new highs for the year. CF is now up five days in a row. If you're looking for an entry point then wait for a dip back toward the $85-84 zone. I'm raising our stop loss to $83.49. Our first target to take profits is at $92.50. Our second target is $98.00. FYI: The P&F chart has a quadruple-top bullish breakout buy signal with a $99 target.

FYI: Agrium (AGU) is trying to buy CF but CF keeps rejecting the offer calling it too late. At the same time CF is trying to buy Terra Industries (TRA) and TRA keeps rejecting the offer calling it too low. Eventually one of these companies is going to give up or they're finally going to make a big enough offer or somebody else might step in and start bidding. There is a risk that someone bids too much and the market could think they overpaid, which might push the stock lower. This M&A dance has been going on for months and it will probably continue for months so I'm not expecting it to have much short-term impact on the stock. However, it's worth noting that CF recently filed a lawsuit to force TRA to hold their annual shareholder meeting. This way CF can try and vote some members onto the board of directors.

Picked on September 05 at $ 85.93
Change since picked:       + 2.15
Earnings Date            10/27/09 (unconfirmed)
Average Daily Volume =        653 thousand 
Listed on September 05, 2009         


Compass Minerals - CMP - close: 57.60 chg: +0.01 stop: 53.60

There is no change from my prior comments. Yesterday looks like a short-term top and failed rally at resistance. I would expect a correction back to the $55.00-54.00 zone. Wait for the dip before launching new positions. More conservative traders may want to start taking profits near $59.00 now.

Our first target is $59.75. We can tentatively set a second target at $64.00. FYI: The Point & Figure chart has turned bullish with a $69 target.

Picked on September 03 at $ 55.55
Change since picked:       + 2.05
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        415 thousand 
Listed on September 02, 2009         


Danaher Corp. - DHR - close: 66.57 change: +0.70 stop: 62.25

I am somewhat surprised by the relative strength in DHR today, especially after yesterday's performance. I'd still buy calls on dips near $65.00. Plus we have a trigger at $63.50 to buy the second half of our position. Our first target is $69.00. The Point & Figure chart is bullish with a $77 target.

Picked on September 05 at $ 66.37 (buy 1/2 position)
               /originally listed at $65.76, gap higher entry @ 66.37
Change since picked:       + 0.20

Picked on September xx at $ xx.xx (buy 2nd half position) @ 63.50
Change since picked:       + 0.00

Earnings Date            10/15/09 (unconfirmed)
Average Daily Volume =        2.4 million  
Listed on September 05, 2009         


Factset Research - FDS - close: 59.47 chg: +1.92 stop: 54.90 *new*

Whoa! The action in FDS is starting to get too hot. Shares gained another 3.3% on above average volume. The next test is potential resistance at $60.00. If you're looking for an entry point I'd wait for dips in the $57.50-57.00 zone. I'm upping our stop loss to $54.90. Our first target is $62.00. Our second target is $64.75. The point and figure chart is bullish with a $76 target. Please note that FDS is due to report earnings in late September and we'll plan to exit before the company announces.

Picked on September 08 at $ 57.55
Change since picked:       + 1.92
Earnings Date            09/22/09 (unconfirmed)
Average Daily Volume =        331 thousand 
Listed on September 05, 2009         


Fedex - FDX - close: 72.04 change: +1.11 stop: 67.25

Transports performed well today. Traders bought the afternoon dip in FDX near $71.00. Our first target to take profits is at $74.75. Our second target to exit is at $79.00. This could take a few weeks to achieve.

Picked on September 04 at $ 70.55 *triggered
Change since picked:       + 1.49
Earnings Date            09/17/09 (unconfirmed)
Average Daily Volume =        2.7 million  
Listed on September 03, 2009         


Goldman Sachs - GS - close: 170.27 change: +3.05 stop: 159.00

GS was a market leader with another strong gain. The stock is quickly approaching potential resistance at its early August highs in the $170-171 zone. If you missed the entry point I'd look for dips near $167.00-166.00.

Our first target is $179.00. FYI: The Point & Figure chart is bullish with a $228 target. Remember, we want to trade small position sizes.

Picked on September 8 at $166.75
Change since picked:      + 3.52
Earnings Date           10/13/09 (unconfirmed)
Average Daily Volume =       8.8 million  
Listed on August 29, 2009         


Genesse & Wyoming - GWR - close: 31.45 change: -0.24 stop: 28.90

GWR is still fighting with resistance near $32.00. More conservative traders may want to take some money off the table right here. At the moment our first target is at $32.90. Our second target is $34.75.

FYI: We want to use small position sizes to limit our risk.

Picked on   August 15 at $ 28.66 /gap down entry
                               /originally listed at $29.30
Change since picked:      + 2.79
Earnings Date           11/03/09 (unconfirmed)
Average Daily Volume =       230 thousand
Listed on August 15, 2009         


Grainger W.W. - GWW - close: 88.90 change: -0.61 stop: 84.75

GWW gapped open lower this morning and spent the rest of the session trying to recover. I didn't see any specific news behind the weakness. If you didn't buy the dip with us at $86.00 I'd wait for a breakout over $90.35 before launching new positions. Our first target is $93.50. Our second target is $97.50.

Picked on September 1 at $ 86.00 *triggered  
Change since picked:      + 2.90
Earnings Date           10/14/09 (unconfirmed)
Average Daily Volume =       635 thousand 
Listed on August 22, 2009         


iShares Financials - IYF - close: 51.30 change: +0.67 stop: 44.90

I'm adding a trigger to buy calls on a breakout. The August high was $52.47. Our breakout trigger to buy calls will be $52.60. This is an aggressive entry point and we want to trade very small position sizes. If triggered at $52.60 we'll use a stop at $49.49. Our original plan was to buy calls on a dip at $47.00 with a stop at $44.90.

Picked on September xx at $ xx.xx <-- TRIGGER @ 47.00 or 52.60
Change since picked:       + 0.00
Earnings Date            00/00/00
Average Daily Volume =        5.1 million  
Listed on September 01, 2009         


Mettler Toledo - MTD - close: 87.90 change: +0.31 stop: 84.99

MTD is still creeping higher. I don't see any changes from my prior comments. Readers can use the move as a new bullish entry point or wait for a new relative high. Keep in mind that the $90.00 level could be round-number resistance and is the top of the October 2008 gap down. Our first target is $93.50. Our second target is $99.00. I am labeling this an aggressive play because volume is pretty light for this stock.

Picked on   August 27 at $ 88.50 *triggered  (1/4 normal size)
Change since picked:      - 0.60
Earnings Date           11/05/09 (unconfirmed)
Average Daily Volume =       234 thousand 
Listed on August 22, 2009         


Newmarket Corp. - NEU - close: 87.97 change: +3.12 stop: 79.00

NEU delivered an impressive day with a 3.6% rally. The stock is now testing resistance near $88.00. I am adjusting our exit strategy and suggest readers take profits now instead of waiting for $88.50. Our second and final target is $92.50. FYI: The Point & Figure chart is bullish with a $116.00 target.

Chart:

Picked on   August 24 at $ 84.33 <- buy half now 8/24/09
                    /originally listed at $83.54, gapped higher @ 84.33
Change since picked:      + 3.64
                               /take profits @ 87.97 (+4.3%)

Picked on September 1 at $ 80.50 *triggered 2nd half
Change since picked:      + 7.47
                               /take profits @ 87.97 (+9.2%)
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       141 thousand 
Listed on August 24, 2009         


Occidental Petrol. - OXY - close: 75.85 change: +0.78 stop: 69.45

OXY continues to rally and is now testing resistance near $75.00. Our first target is $77.00. Our second target is $79.85.

Picked on   August 27 at $ 72.00 *triggered         
Change since picked:      + 3.85
Earnings Date           10/28/09 (unconfirmed)
Average Daily Volume =       5.0 million  
Listed on August 26, 2009         


PPG Inds. Inc. - PPG - close: 56.46 change: +1.07 stop: 52.95

PPG is climbing on rising volume, which is normally a bullish sign. More conservative traders may want to consider a tighter stop near $53.25. Our first target is $59.80.

Picked on   August 28 at $ 55.65
Change since picked:      + 0.81
Earnings Date           10/27/09 (unconfirmed)
Average Daily Volume =       1.6 million  
Listed on August 27, 2009         


State Street (Bank) STT - close: 53.19 change: +0.88 stop: 49.45

Financials finally started to join the party later in the session and STT closed with a 1.6% gain. I would still consider new positions here if you're target is the $60 region.

Our first target is $55.00. Our second target is $59.80. Currently the Point & Figure chart is bullish with a $62 target.

Picked on   August 31 at $ 52.00 
Change since picked:      + 1.19
Earnings Date           10/13/09 (unconfirmed)
Average Daily Volume =       5.3 million  
Listed on August 19, 2009         


United Health - UNH - close: 28.40 change: +0.56 stop: 27.49

Healthcare stocks might show some volatility tomorrow as the sector reacts to President Obama's speech tonight on healthcare.

Our plan is to buy calls on UNH at $30.55. If triggered our first target to take profits is $34.50. Our second target is $37.50. My time frame is about eight weeks.

FYI: If you prefer a neutral strategy consider some sort of straddle or strangle on UNH. That way you don't care what direction this stock moves.

Picked on   August xx at $ xx.xx <-- TRIGGER @ 30.55
Change since picked:      + 0.00
Earnings Date           10/20/09 (unconfirmed)
Average Daily Volume =       9.2 million  
Listed on August 29, 2009         


Union Pacific - UNP - close: 62.25 change: +0.58 stop: 59.40

UNP tagged a new high over $63.00 midday. Our trigger to buy calls was $63.00 so the play is open. Our first target is $69.00. FYI: The P&F chart is currently bullish with an $88 target.

Chart:

Picked on September 09 at $ 63.00
Change since picked:       - 0.75
Earnings Date            10/22/09 (unconfirmed)
Average Daily Volume =        3.2 million  
Listed on September 05, 2009         


U.S. Oil Fund - USO - close: 36.94 change: +0.00 stop: 34.49

The rally in oil stalled even as the U.S. dollar sank to new lows. The contraction from its intraday highs might suggest a short-term top. I'm not suggesting new positions at this time. Don't be surprised to see a dip back toward the $36.00-35.50 zone. Our first target to take profits is at $39.95.

Picked on   August 31 at $ 36.50 
Change since picked:      + 0.44
Earnings Date           00/00/00
Average Daily Volume =      11.5 million  
Listed on August 15, 2009         


PUT Play Updates

*Currently we do not have any put play updates*


Strangle & Spread Play Updates

(What is a strangle? It's when a trader buys an out-of-the-money (OTM) call and an OTM put on the same stock. The strategy is neutral. You do not care what direction the stock moves as long as the move is big enough to make your investment profitable.)

Cigna Corp. - CI - close: 29.41 change: +0.01 stop: n/a

CI continues to move sideways, which provided us an opportunity to open positions. The healthcare stocks might be volatile tomorrow as investors react to President Obama's speech tonight on healthcare.

The options I suggested were the October $35 calls (CI-JG) and the October $25 puts (CI-VE). Our estimated cost was $1.20. We want to sell if either option hits $2.50 or higher. The closer we can open this trade to $30.00 the better.

Picked on September 08 at $ 29.40
Change since picked:       + 0.01
Earnings Date            11/05/09 (unconfirmed)
Average Daily Volume =        3.8 million  
Listed on September 08, 2009         


Research In Motion - RIMM - close: 78.22 chg: -1.06 stop: n/a

RIMM suffered some profit taking this afternoon. We have less than two weeks left before September options expire. I'm not suggesting new positions at this time.

The options suggested were the September $80 calls (RFY-IP) and the September $70 puts (RFY-UN). Our estimated cost was $2.64. We want to sell if either option hits $6.00 or higher.

Picked on   August 25 at $ 75.56
Change since picked:      + 2.66
Earnings Date           09/24/09 (confirmed)
Average Daily Volume =      11.7 million  
Listed on August 25, 2009         


Schlumberger - SLB - close: 57.36 change: -0.74 stop: n/a

SLB also suffered a little profit taking today. I'm not suggesting new strangle positions.

The options we suggested were the September $60.00 calls (SLB-IL) and the September $45.00 puts (SLB-UI). Our estimated cost is $1.00 and we want to sell if either option hits $2.50 or higher.

Picked on   August 15 at $ 52.00 /gap down entry Aug. 17th
Change since picked:      + 5.36
Earnings Date           10/15/09 (unconfirmed)
Average Daily Volume =       9.2 million  
Listed on August 15, 2009         


CLOSED BEARISH PLAYS

Apollo Group - APOL - close: 66.63 chg: +1.20 stop: 66.55

The market's strength was enough to lift APOL through the $66.00 level and hit our stop loss at $66.55. Longer-term the pattern is bearish but very short-term the trend is up.

Chart:

Picked on September 01 at $ 63.63 
Change since picked:       + 2.92<-- stopped @ 66.55 (+4.5%)
Earnings Date            10/28/09 (unconfirmed)
Average Daily Volume =        1.9 million  
Listed on September 01, 2009